According to HSBC analyst James Pomeroy the first country to launch its own cryptocurrency could be Sweden. Another prediction to add to the daily quota that seem to be flying in from all directions these days!
It Could Happen In The Next Few Years
In November 2016 Sweden’s Riksbank let it be known that they were exploring the prospect of introducing their digital currency called the ‘e-krona’ and now Pomeroy predicts it could happen in the next few years. Sweden, a card friendly country already and comfortable with non-physical financial transactions, is in a good position to lead the world with their ‘e-krona.’
Pomeroy commented. “Sweden is noticeably further ahead than the UK, mainland Europe and the US, which is a long way behind in this trend. Because of how technologically developed it is, you see a lot of new interesting things in economics quite a while before you see it elsewhere. Sweden is really a standout in how cash usage is changing, with the use of cash for payments dwindling from about 40 percent in 2010 to about 15 percent in 2016. The Riksbank will publish more data on this year and I wouldn’t be surprised at all if it has fallen below 10.”
It’s No Longer A Question Of If But What Specific Form It Will Take!
A Blockchain style system could be an option which would use peer-to-peer e-krona accounts working from a central database similar to Bitcoin. Another idea could be to use an app or card which links transactions to a database.
Pomeroy continued. “I get the sense it’s inevitable the Riksbank will do something, the question is what form does it take? Is it, as they put it, a value-based system, or is it a register-based system, which is like Blockchain. The Riksbank said the latter allows you to do more, but they don’t know if the technology works yet. If they have to rush into doing something, it’s more likely they’ll do the value-based system, but if they take longer to do it and see how the technology progresses, you could see the register-based system, which is essentially a central bank cryptocurrency.”
Sweden’s Young Population Is Another Plus
Sweden’s young population is another plus factor, to go with the already mentioned high level use of non-cash transactions, which points favourably to Sweden becoming the first country with its own cryptocurrency.
The ‘e-krona,’ at least at the beginning, is not expected to replace cash completely. It’s expected to get Sweden ahead of the ball game should a situation arise where cash is not accepted as a means of payment which we know is happening as there are cash free cafes shops in Sweden.
Pomeroy Concluded: “It’s telling how many places in Sweden have stopped accepting cash – that’s where the central bank has to step in. If you cross the line where retailers or cafes for example stop accepting cash, then you need a form of electronic payment to pay for things. The Riksbank is simply saying that if that happens, the job of the central bank is to provide a means of payment that’s acceptable to all people. If cash is no longer an accepted means of payment, the central bank has the task of providing an alternative.”